Residential construction activity and the supply of new homes increased sharply last year with more than 28,000 new address points added to the property database GeoDirectory.
The group’s latest residential buildings report, compiled in conjunction with EY, noted, however, that prices and rents were continuing to rise, suggesting “demand is continuing to outpace supply” while highlighting a significant affordability gap in three of the State’s main cities.
The report found that in the 12 months to December, 28,510 new residential address points were added to the GeoDirectory database, representing an increase of 58 per cent on the corresponding period in 2021.
More than half (52.8 per cent) of these new addresses were located in the Greater Dublin Area of Dublin, Kildare, Meath and Wicklow.
The report also found that, as of December last year, some 22,008 residential buildings were under construction, an increase of almost 13 per cent year on year. Almost one in five were located in Dublin while 62 per cent of all residential buildings under construction were located in the Leinster region.
Housing commencements totalled nearly 27,000 in the 12 months to November but this represented a decline of almost 12 per cent on the previous year.
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Despite the increase in construction activity and supply of housing stock, the biannual report, which is based on GeoDirectory’s database of over two million residential buildings, said supply was “still lagging well behind the current rate of demand”.
It noted that the average residential property price increased by 9.5 per cent to €352,083 in the 12 months to October 2022, with the average price rising in every county.
The average cost of a residential property in Dublin was €526,910, while Longford was the county with the lowest average price (€162,990). A total of 47,716 residential properties were purchased in the Republic in the 12 months to October, an increase of 3,606 transactions on the previous year, it said.
For the first time, the report also started tracking average rent prices for new tenancies. The study highlighted that the average rent increased by 8.2 per cent between the first and second quarters of last year, while the highest average rent price in the second quarter was recorded in the Dún Laoghaire-Rathdown region (€2,231). The lowest average rent price could be found in Donegal (€783).
By examining average rental prices against the metric of 30 per cent of a household’s gross monthly income, a yardstick is that is used internationally, the report found that, on average, there is an affordability gap in three of the State’s largest cities, with Dublin at 27 per cent, Cork at 18 per cent and Galway at 6 per cent.
A total of 83,662 residential properties were recorded as vacant in December 2022, resulting in an average national vacancy rate of 4 per cent, the lowest recorded by GeoDirectory to date. The highest residential vacancy rates were located in the west of the country, with Leitrim (12.2 per cent), Mayo (11.2 per cent) and Roscommon (10.7 per cent) all recording residential vacancy rates of over 10 per cent.
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At 1.2 per cent, Dublin recorded the lowest residential vacancy rate in the State. Counties within the capital’s commuter belt also had low vacancy rates, Kildare (1.3 per cent), Louth (2.3 per cent) and Meath (2.4 per cent).
“At a national level, the residential vacancy rate of 4 per cent is the lowest recorded by GeoDirectory to date. However, this figure highlights a national imbalance of low vacancy rates and high demand in Dublin and surrounding counties, contrasted by considerably higher vacancy rates in the west of the country,” Annette Hughes, director of EY economic advisory services, said.
Dara Keogh, chief executive of GeoDirectory, said: “The data shows that construction activity and supply of housing stock increased significantly in 2022, but it is still lagging well behind the current rate of demand.”
“The number of residential buildings under construction and additions to the housing stock over the past 12 months would indicate that the sector has moved past the disruption brought about by Covid-19,” he said.
